Rail Market in Turkey up to 2023
Rail Market in Turkey
up to 2023
This strategic insight provides an outlook for growth opportunities in
the Turkish rail market.. The study discusses key trends, market drivers and
restraints, opportunities, market size, and forecasts for investments and
rolling stock deliveries. It provides an overview of the Turkish State Railways
organization, and the country's current rail network. The base year is 2016;
the forecast period is from 2016 to 2023.
Rail Market: Key Takeaways, Turkey, 2017
1 Overall growth in the rail sector is driven by factors such as public funding, rising freight volumes, and political stability. Between 2017 and 2023, rail infrastructure development projects in the country will be worth about € billion.
2 In the majority of projects, investment is directed toward construction of new high-speed lines, electrification, extensions, and infrastructure upgrades.
3 There are approximately locomotives and multiple units in active service, The overall fleet is moderately young, with several new deliveries expected by 2023.
4 Investment in coal power, railway privatization, and open access are projected to boost rail volumes and revenues.
5 Turkey is highly receptive to foreign investment in the rail market. Regulatory changes will promote foreign investments through public-private partnerships
Type of Rolling Stock
-Electric locomotives(CoCo Type for freight operations) are expected to witness the highest growth rate.
- The demand for HSR rolling stock is expected to decline after 2020 as all projects come to a close.
- Separation of passenger and rail freight and infrastructure improvement are expected to boost rail freight volumes.
Rail Market: Key Takeaways, Turkey, 2017
1 Overall growth in the rail sector is driven by factors such as public funding, rising freight volumes, and political stability. Between 2017 and 2023, rail infrastructure development projects in the country will be worth about € billion.
2 In the majority of projects, investment is directed toward construction of new high-speed lines, electrification, extensions, and infrastructure upgrades.
3 There are approximately locomotives and multiple units in active service, The overall fleet is moderately young, with several new deliveries expected by 2023.
4 Investment in coal power, railway privatization, and open access are projected to boost rail volumes and revenues.
5 Turkey is highly receptive to foreign investment in the rail market. Regulatory changes will promote foreign investments through public-private partnerships
Type of Rolling Stock
-Electric locomotives(CoCo Type for freight operations) are expected to witness the highest growth rate.
- The demand for HSR rolling stock is expected to decline after 2020 as all projects come to a close.
- Separation of passenger and rail freight and infrastructure improvement are expected to boost rail freight volumes.
2023 Targets in Rail Freight – Logistic Centers
One of the remarkable targets
of Transportation Ministry in 2023 Strategy is the logistic centers.
Unquestionably, deorganized
and non-railway-connected industry is a big barrier for the development of
railways in Turkey. If railway connected logistic centers can be center of
attraction for the relocating Turkish industry due to incentives and
urbanization, railway transportation in Turkey, mostly limited with mining and
container, can break its walls.
The 18 logistic centers
(although different numbers declared in different sources, TCDD’s website is
used) to be constructed by TCDD and completed till 2023 are listed as follows:
Completed Logistic Centers: Halkali, Samsun-Gelemen, Usak
Logistic Centers with 1st
Phase Completed: Kosekoy-Izmit,
Hasanbey-Eskisehir, Kaklik-Denizli, Bogazkopru-Kayseri
Logistic Centers Under
Construction: Yesilbayır-Istanbul,
Gokkoy-Balikesir, Bozuyuk-Bilecek, Kayacik-Konya, Yenice-Mersin, Sivas,
Turkoglu-Kahramanmaras, Kars, Palandoken-Erzurum, Mardin
Let’s see the completed and
semi-completed ones in detail:
Halkali Logistic Center
(Istanbul)
The terminal is currently
closed to railway traffic because of construction works. It’s also the most
important exports customs for trucks, but it’ll soon move to the new place in
Ambarli. The terminal is in the middle of residences and will be an important
stop for Marmaray passengers. So the future of Halkali as a logistic center for
railway is also under discussion. Nonetheless, with strong customs, closed
warehouses, a number of park lines, being the nearest terminal to industry,
Halkali has been the last stop for almost all container trains from Europe.
Terminal is established on 1m sqm, and 800k to was carried by rail in 2012. The
most important change in terminal was the reconstruction of warehouses. Last
month, there was a new tender of construction on 200k sqm of Halkali terminal.
Gelemen Lojistik Merkezi
(Samsun)
The first phase of the center
opened in 2007. It’s an important transition point for the loads to Russia and
Kazakhistan. The total area for center is 350k sqm and target is to increase
the traffic from 500k to to 1100k to. Realizations are 854k to in 2008, 597k to
in 2011, 600k to in 2012. The long connection of Gelemen to west side of Turkey
and the axle change in Russian wagons cause most of the loads to move in Turkey
by truck and transshipped to Russian wagons in port, and limits the
contribution of logistic center.
Usak Logistic Center
Established on 140k sqm, and
has a target of doubling the traffic which is 113k to. Although stated as
“completed”, last month, the president of Chambers of Industry and Commerce was
complaining about the lack of railway connections to industry.
Kosekoy Logistic Center
(Izmit)
Kosekoy is closed to railway
traffic since 2012. Before that, especially Omsan trains and exports to Iran
were being organized. When it’s completed, the total area of terminal will be
765k sqm, where now it’s 115k sqm. With the completion, the annual load flow
will increase to 1.5m to from 600k to. TCDD had completed the preparations
about bounded area recently and started the official process. Not having a
separate customs may be a disadvantage. Planned to serve to Gebze-Izmit-Sakarya-Bursa
regions. Its future will be determined by the effective and cheap customs,
trucking and ferry services.
Hasanbey Logistic Center
(Eskisehir)
The total area for the center
is 630k sqm. It’s not opened yet. Is next to industrial region and has railway
connection. Probably will be opened before elections. Annual load flow is
planned to increase from 215k to 515k to.
Bogazkopru Logistic Center
(Kayseri)
Bogazkopru Logistic Center is
next to Kayseri Industry Region, and currently is being organized the longest
container trains to Mersin. The railway connection passing through the city
center will be shifted to out of city which will support logistic center as
well. The construction started in 2009, and is planned to be ready in following
months. When all completed, the total area will be 1.5m sqm and loads handled
will reach to 1.7m to (currently it’s 700k to). The handling, storage and
trucking is being held by a private company for a long time.
Kaklik Logistic Center
(Denizli)
Kaklik is under construction.
Last announcement about the opening of center was end of this year. Total area
is planned to be 120k sqm, and the load flow is planned to increase from 150k
to 500k to. Textile has an important place in Denizli industry, effective connections
to container lines is essential for center.
2023 Targets in Rail Freight – Network
Turkish Ministry of Transportation announced the 2023 target of
constructing 4000 km new conventional rail lines in 2011.
Conventional lines will be used mainly for freight logistics. Therefore it
is esential for industry and followed closely by railway professionals although
overshadowed by high speed trains. Here’s the report of conventional targets at
the end of 1.5 year:
No new conventional line had opened till July 2013. Total length is still
8770 km. Target is to reach to 8961 km at the end of this year. Based on 10.
Development Program, it’ll reach to 10556 km at the end of 2018. And finally,
if targets realized, total length of railways in Turkey will reach to 12770 by
2023.
The new railway routes mainly for freight transportation in 2023 targets
are as follows:
Adapazari-Karasu-Eregli-Bartin : The construction in first phase,
Adapazari-Karasu had already started, but ended because of increase in costs
due to geologic problems faced. This part planned to be finisihed till the end
of 2018. By that, Istanbul will be able to reach to Black Sea via Karasu Port.
In following phases, Eregli Demir Celik with a huge potential of steel loads
for railway will be connected to Turkish railway system.
Aliaga-Candarli : Project is ready, under evaluation. Main target is
to connect Turkey’s –so planned- biggest container port by rail. This line is
also a part of extending Ege Ray to Bergama and extending high speed line from
Bursa to Izmir.
Kars-Tiflis-Bakü : Rail lines have just started to be laid down. The
biggest improvement among all. Will connect Turkey to other side of Caspian Sea
via Azerbaijan. Construction had faced with problems in Azerbaijan, but last
month leaders of three contries had declared that the project will open within
2013.
Kars-Nahcivan (Iran) : Still on project phase. Declared in 2012, and
added to 2023 targets. Yet the only way to Iran is via Van Lake. This will be
an alternative, “complete on land” solution with a new constructed 335 km and a
budget of 1.5 billion dollars.
Nusaybin-Silopi-Habur : Yet the only railway connection to
Iraq is via Syria, and closed for more than a year. Therefore an alternative
connection to Iraq via Habur is planned. Has top priority. 268 km. A tender was
organized for project and engineering in 2013. Planned to organize the tender
for construction in 2014.
Mursitpinar-Sanliurfa : Being studied. Will be announced in 2014. 154
km. Is planned to be extent to Diyarbakir till 2023.
Gemlik-Bursa : Added to 2023 targets with high pressure of manufacturers of Bursa.
Nothing started yet.
Palu-Genc-Mus : Construction has been started. Because of the problems in tender
process, some delays are expected. Since the current line is passing through
the reservoir of dam in construction, line has to be shifted. Planned to be
completed within 5 years period of 10th Development Program.
There are some other planned new lines as Mardin-Diyarbakır, Kurtalan-Cizre
and Gaziantep-Nurdag.
Furthermore, second lanes are planned to be constructed for the lines with
heavy traffic. Konya-Adana, Sivas-Kayseri-Adana and Malatya-Adana lines are
planned to be two lanes by 2023.
Funding
Funding for Turkey's high-speed and railway development programme has
largely come from the central government. An estimated Lira 50bn ($US 17.56bn)
has been invested since 2003, and Murtazaoglu says Turkey, like other
countries, is committed to investing in rail as a sustainable,
environmentally-friendly and ultimately cheap mode of transport.
Yet for certain projects other methods of finance have been used. For example
European Investment Bank credit and a loan from China Exim Bank was used to
partly fund the Eskisehir - Istanbul high-speed line. A European Union
Instrument for Pre-Accession Assistance (IPA) grant of €220m, which is
available for EU candidate countries such as Turkey, is also funding the
upgrade of the Samsun - Sivas conventional line with TCDD contributing €39m.
The project includes easing curves on the existing 370km route to increase
line speeds and cut the journey time from nine hours at present to five hours
upon completion in 2018. Service frequency on the route will also be increased
from 21 to 54 trains per day, boosting passenger traffic from 95 to 168 million
passenger-km and freight from 657 to 857 million tonne-km per year.
The current limited services and slow journey times on the existing Samsun
- Sivas route is a situation replicated across the conventional network; it
currently takes 14 hours to complete the 825km journey from Ankara to Izmir,
for example. The addition of high-speed has already improved rail's public
transport market share: from 8% of passengers on the Ankara - Eskisehir line
previously, to 72% since the high-speed link opened, and between Ankara and
Konya, where there was no rail service previously, rail now accounts for 66% of
all journeys.
Murtazaoglu says there is a prevailing ambition to transfer this success to
conventional services. As a result a similar programme of rapid improvements
for key corridors is underway. Murtazaoglu says TCDD aims to complete a
north-south axis by 2023 that will connect Samsun on the Black Sea coast with
Mersin on the southern Mediterranean coast, and the Mediterranean tourist
resort of Antalya with Istanbul. Both lines will accommodate mixed passenger
and freight traffic with a maximum speed of 200km/h, with trains from Antalya
to Istanbul utilising the high-speed alignment beyond Eskisehir.
In addition this work is combined with an extensive programme of
electrification and signalling improvements.
"On our conventional lines we currently have approximately 2800km of
modern signalling and 2200km of lines which are electrified," Murtazaoglu
says. "By the end of 2023 we plan to increase electrification by three
times, and 70% of our lines will have modern signalling. This will allow us to
double our capacity and reduce emissions, while improving journey times and
comfort. When we connect all of this we will increase freight from 26 million
to 96 million tonnes per year, and passenger numbers from 180 million to 945
million per year."
Liberalisation
Private players are set to
play a key role in the expansion of Turkey's ralfreight sector. Already 4100
privately-owned wagons are in use and according to Murtazaoglu 33% of loads are
now carried using private rolling stock.
The impending liberalisation
of the Turkish railway sector will open this up further. Under the plans, which
Murtazaoglu says will be implemented in the second half of the year, TCDD will
become solely an infrastructure manager with TCDD Transport Joint Stock Company
founded to run passenger and freight operations on the network. The Director
General for Railway Regulation (DDGM), a division of the Ministry of Transport,
Maritime Affairs and Communication, acting under Law 6461 of the railway
sector, will oversee the liberalisation process and issue network access
licences to private operators viewed as meeting the necessary regulations.
"The private operators
will pay to use our lines and all maintenance will be carried out by TCDD, the
infrastructure manager," Murtazaoglu says. "They will pay and they
will use the network. They can have their own trains, or they can lease them.
Whatever they want, it will be a liberal system."
Murtazaoglu says that initially liberalisation will focus on freight operations, with a view to assessing the case for opening up the passenger market in the future. He says that TCDD Transport, while being funded by the Turkish treasury, will be run as a private company.
Murtazaoglu says that initially liberalisation will focus on freight operations, with a view to assessing the case for opening up the passenger market in the future. He says that TCDD Transport, while being funded by the Turkish treasury, will be run as a private company.
"There will be no
difference between TCDD and any company offering a service. They will obey all
the same rules," Murtazaoglu says, adding that the DDGM will work to
ensure the infrastructure manager's independence, which is critical to the
success of the liberalisation programme. "Anyone who thinks that TCDD is
not independent will be able complain to the DDGM," he says.
Liberalisation is perhaps an
inevitable outcome of the huge sums pumped into the railway sector in Turkey
since 2003. It will certainly provide more opportunities for the new
infrastructure to deliver on its potential in the run-up to the
politically-important deadline of 2023. This expansion of service and
capability is also transforming the finances of TCDD. From a heavy loss-making
operation, passenger numbers are now rising steadily as the service frequency
increases, and the company could soon report an operating profit.
"Previously our network
was not sufficient to warrant high demand from passenger or freight
services," Murtazaoglu says. "However, we believe that if we
construct the necessary infrastructure and complete the current investment that
we have planned up to 2023, considering expected passenger and freight demand,
we will become a profitable enterprise."
Whether all of the proposed
investments are completed by 2023 remains to be seen. Resourcing such an array
of projects which are all taking place at the same time is a significant
challenge. However, Murtazaoglu says the hope, "insallah," is that
with the government continuing to provide the financial support, the vast
majority of the schemes will be delivered as planned. And given how far TCDD
has come, and with seven years still to go, there is still a chance that he
might be right.
"All infrastructure
works have their own difficulties," he says. "Certainly it is not so
easy, things might not go as you thought. But we have enough technical services
and technical capacity and we can get additional services as we need them. We
have the capacity to complete by the end of 2023."
References:
3-http://www.railjournal.com/index.php/high-speed/expansion-and-reform-reshape-turkeys-railways.html
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